The average American has little to no money saved in the bank and lives paycheck to paycheck. Personal savings is important to help people to make big purchases without paying interest, to deal with unexpected expenses and to survive an unexpected job loss. As April is Financial Literacy Month, there is no better time to start saving than now.
For decades, schools spent little time teaching students about money. However, in recent years, personal finance classes have become more common in schools across the country. Some states are even mandating personal finance as a required class before a student qualifies to graduate from high school. Whether a person is a student or is already out of school, there are many sources of information available to learn money skills. Just a little effort can make a big difference in improving a person’s financial understanding.
Modern technology can play a role in making it easier to save. Most employers require paychecks to be direct deposited into an employee’s account. The direct deposit system makes it easy for people to have a portion of their paychecks put into a savings account. Online banking, saving and investing apps and electronic fund transfers have made it easier than ever for people to save and invest for the future. However, all the technology that exists can’t make decisions for people. People need to act to use the technology that is available to start saving money for the future.
In one form or another, retirement savings accounts are available to everyone. Most employees have access to 401k accounts and IRA accounts are available to almost anyone with taxable income. Most people believe they do not have the money to start saving for retirement. However, with careful budgeting, most everyone could start saving for retirement. Retirement savings are especially important for those whose employer match contributions. The employer match is basically free money and anyone eligible for a match should take advantage of it.
The public education system has not done a good job of teaching personal finance and related skills. Hopefully the education problem will get better in the coming years. However, it is never too late to learn. There are many sources of financial education available online and off to help people of any age to learn about managing money. By taking the time to learn about budgeting and investing, people can learn to better handle their money so that they can plan for their financial future, avoid financial struggles and have a comfortable retirement.